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Author Topic: Three ways to save Bitcoin  (Read 3765 times)
justusranvier
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October 24, 2011, 09:43:12 PM
 #1

In order for Bitcoin to succeed as a currency people need to use it but unfortunately only about 0.00001% of the population will use an alternative currency for purely philosophical reasons. Everybody else needs a very clear and compelling reason that's sufficient to overcome the switching costs and increased complexity of dealing with multiple currencies. Here are three areas in which Bitcoin could potentially offer the rest of the world sufficient value to cause more people to switch.

1. Superior alternative to Paypal, etc

I listed this one for completeness but I think everybody understands this one and many people are actively working on it already.

2. The remittance market

Anybody who has ever sent money to friends or family members in other countries (or even within the same country) knows how expensive and inconvenient these services tend to be. There's a lot of potential here especially since the Bitcoin network takes care of the transfers itself.

The missing piece that keeps people in the developed countries from using Bitcoin to send remittances back to the less-developed countries is a lack of exchanges in those countries.

People who have sufficient knowledge of international business, local laws, contacts in the recipient country and access to capital can start exchanges there and then put out information campaigns in the developed countries to let the target population know that if they send Bitcoins to their family abroad the recipients would have a way to turn those Bitcoins into local currency (emphasizing the speed and cost aspects of doing so).

3. The informal economy

There are billions of people in the world who are trapped in poverty due in no small part to their inability to accumulate capital. Any segment the banking and legal systems can not or will not serve yet where the participants have internet access is a potential area in which people can benefit from Bitcoin. Any time that technology can be used to bypass legal obstacles to supplying a good or service there's an opportunity to grow the Bitcoin economy and provide the individuals involved in that activity with the benefits that come with having access to the services normally supplied by banks.

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Etlase2
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October 25, 2011, 02:06:52 AM
 #2

So your solution is have bitcoin do what it already does... except make more people use it. hrm.

Until the speculative bubble ends, which it never will as long as huge quantities of coins are hoarded, bitcoin is going to have trouble gaining acceptance. If the hoarded coins get into the supply, the price tanks even further lowering confidence even more. It's a pretty big bitch of a problem at this point.

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October 25, 2011, 02:20:33 AM
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So your solution is have bitcoin do what it already does... except make more people use it. hrm.
I'm just pointing out some constructive things that people can do to make a positive contribution rather than useless, silly pledges to not exchange Bitcoins for fiat and other such nonsense.

I must plead ignorance since I don't read the Spanish section of the forum but can a middle/working class person in Colombia, Peru or Chile go to a physical location and exchange Bitcoins for local currency?
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October 25, 2011, 02:26:56 AM
 #4

I don't know or care, but encouraging poor economies to accumulate their wealth in bitcoin strikes me as devious. People are guaranteed to lose wealth when investing in bitcoin. It is just a matter of who takes the brunt of it and when it happens. The velocity of money compared to the supply is so insanely out of whack. Until people decide they want to lose wealth just to ensure bitcoin gets stable, I don't think you're going to see a very stable BTC economy. Asking those without wealth as it is to take that hit is not very moral in my book.

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October 25, 2011, 02:51:30 AM
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I don't know or care, but encouraging poor economies to accumulate their wealth in bitcoin strikes me as devious. People are guaranteed to lose wealth when investing in bitcoin. It is just a matter of who takes the brunt of it and when it happens. The velocity of money compared to the supply is so insanely out of whack. Until people decide they want to lose wealth just to ensure bitcoin gets stable, I don't think you're going to see a very stable BTC economy. Asking those without wealth as it is to take that hit is not very moral in my book.
I believe you completely missed the point of my post. I'm talking about using Bitcoin as a medium of exchange, not as an investment. I did mention using it as a means of forming capital in point 3 but that's more of a long-term effect than something to aspire to in the immediate future.
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October 25, 2011, 03:44:40 AM
 #6

as to #3, this is what has made M Pesa successful in Kenya.  i can easily see Bitcoin being used favorably as a means of exchange in 3rd world countries.  the cost advantages are so numerous. 

the remittance mkt is also promising but there are only a certain number of exchanges out there.  mtgox does offer many currencies however.
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October 25, 2011, 07:59:33 AM
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I believe you completely missed the point of my post. I'm talking about using Bitcoin as a medium of exchange, not as an investment.

Just because you pretend the two are inseparable does not mean they are. If bitcoin became the primary form of money in Kenya or Zimbabwe or whatever, the economies of those countries would be further crushed when Satoshi or whoever decides to drop a load of 50k coins. And they will rightly see that a bitcoin is no better than a zimbabwe trillion dollar bill.

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October 25, 2011, 10:31:14 AM
 #8

the remittance mkt is also promising but there are only a certain number of exchanges out there.  mtgox does offer many currencies however.
MtGox is irrelevant as far as the remittance market is concerned.

Most of the people receiving remittances do not have bank accounts. The are currently served by a network of physical locations where they receive transfers in cash form.

Setting up these physical kiosks is a prerequisite to making inroads into the remittance market.
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October 25, 2011, 11:15:32 AM
 #9

OP is right, Litecoins are the future!

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October 25, 2011, 11:21:47 AM
 #10

OP is right, Litecoins are the future!
Lawl

right on towards 0.25 LTC per BTC and beyond  Tongue

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October 25, 2011, 11:52:32 AM
 #11

I believe you completely missed the point of my post. I'm talking about using Bitcoin as a medium of exchange, not as an investment.

Just because you pretend the two are inseparable does not mean they are. If bitcoin became the primary form of money in Kenya or Zimbabwe or whatever, the economies of those countries would be further crushed when Satoshi or whoever decides to drop a load of 50k coins. And they will rightly see that a bitcoin is no better than a zimbabwe trillion dollar bill.

why would you assume early adopters would drop a large load of coins at a given pt in time anymore than a Steve Jobs would dump a large load of Apple stock at a given time which he never did?

early adopters of any company usually have an understanding of not disrupting the share price of their stock and will bleed any stock sale they wish to achieve so as not to do so.  and distributing this stock or coin would be a good thing as this would get more coin into the hands of late comers.

Bitcoin is way to early in its evolution to make wild conclusions either direction as to its future.  i personally see all the right principles, philosophy, and economic incentives in place in the code.
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October 25, 2011, 12:22:58 PM
 #12

In order for Bitcoin to succeed as a currency people need to use it but unfortunately only about 0.00001% of the population will use an alternative currency for purely philosophical reasons. Everybody else needs a very clear and compelling reason that's sufficient to overcome the switching costs and increased complexity of dealing with multiple currencies. Here are three areas in which Bitcoin could potentially offer the rest of the world sufficient value to cause more people to switch.

1. Superior alternative to Paypal, etc

I listed this one for completeness but I think everybody understands this one and many people are actively working on it already.

2. The remittance market

Anybody who has ever sent money to friends or family members in other countries (or even within the same country) knows how expensive and inconvenient these services tend to be. There's a lot of potential here especially since the Bitcoin network takes care of the transfers itself.

The missing piece that keeps people in the developed countries from using Bitcoin to send remittances back to the less-developed countries is a lack of exchanges in those countries.

People who have sufficient knowledge of international business, local laws, contacts in the recipient country and access to capital can start exchanges there and then put out information campaigns in the developed countries to let the target population know that if they send Bitcoins to their family abroad the recipients would have a way to turn those Bitcoins into local currency (emphasizing the speed and cost aspects of doing so).

3. The informal economy

There are billions of people in the world who are trapped in poverty due in no small part to their inability to accumulate capital. Any segment the banking and legal systems can not or will not serve yet where the participants have internet access is a potential area in which people can benefit from Bitcoin. Any time that technology can be used to bypass legal obstacles to supplying a good or service there's an opportunity to grow the Bitcoin economy and provide the individuals involved in that activity with the benefits that come with having access to the services normally supplied by banks.




Call me crazy, but I think there is a VERY easy way to save bitcoins (well, not easy in scale, but at least in principle):

CHINA!

That's all bitcoin really needs. Because of the inherent financial difficulties in getting money into, or out of china, if there were a lot of local (even clandestine) bitcoin exchangers for hard cash or other goods/values, the chinese people will be ALL OVER THIS SHIT.

Try sending a wire of any significant value to China (that is 10K USD or more). The government controls everything!

Yet, they are at this time the biggest industrial economy in the world, and probably the biggest exporters in the world.

If we could get the Chinese to use Bitcoin instead of, say, Liberty Reserve, that volume alone will make bitcoin not only survive, but also thrive.

My 2c ...

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The true faces of the Bitcoinica / Intersango SCAM! - Bitcoin was born in the shad0ws, for the shad0ws.
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October 25, 2011, 12:23:40 PM
 #13

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why would you assume early adopters would drop a large load of coins at a given pt in time anymore than a Steve Jobs would dump a large load of Apple stock at a given time which he never did?

Bitcoin is NOT A STOCK. It is a CURRENCY that if you invest in it, it is on the HOPE that early adopters DON'T SELL.

There is no PRODUCT. There is no COMPANY. There is absolutely no basis for any value except SCARCITY.

Any RETURN ON INVESTMENT is in the HOPE that OTHER PEOPLE BUY IN and early adopters DON'T SELL.

A STOCK produces RETURNS by INVESTING YOUR MONEY into a COMPANY, thus giving you PART-OWNERSHIP, that works to improve its PRODUCTION. It does NOT require others to buy in to see an investment return, that is called a PYRAMID.


BITCOIN IS NOT A STOCK. It is NOTHING at all like a stock except that it has a limited quantity and an exchange. You do not OWN anything but a digital trash token. No STOCK starts as being worthless.

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October 25, 2011, 01:20:00 PM
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why would you assume early adopters would drop a large load of coins at a given pt in time anymore than a Steve Jobs would dump a large load of Apple stock at a given time which he never did?

Bitcoin is NOT A STOCK. It is a CURRENCY that if you invest in it, it is on the HOPE that early adopters DON'T SELL.

There is no PRODUCT. There is no COMPANY. There is absolutely no basis for any value except SCARCITY.

Any RETURN ON INVESTMENT is in the HOPE that OTHER PEOPLE BUY IN and early adopters DON'T SELL.

A STOCK produces RETURNS by INVESTING YOUR MONEY into a COMPANY, thus giving you PART-OWNERSHIP, that works to improve its PRODUCTION. It does NOT require others to buy in to see an investment return, that is called a PYRAMID.


BITCOIN IS NOT A STOCK. It is NOTHING at all like a stock except that it has a limited quantity and an exchange. You do not OWN anything but a digital trash token. No STOCK starts as being worthless.

WHY do you use so MANY EFFING all-caps WORDS. It makes your SENTENCES read like something written by a HYPER 4-YEAR OLD that is throwing a TEMPER TANTRUM.

Etlase2
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October 25, 2011, 02:53:04 PM
 #15

WHY do you use so MANY EFFING all-caps WORDS. It makes your SENTENCES read like something written by a HYPER 4-YEAR OLD that is throwing a TEMPER TANTRUM.

Because people around here have a habit of seeing only what they want to see. I figured I'd help out by emphasizing words that shouldn't be ignored.

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October 25, 2011, 04:27:00 PM
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why would you assume early adopters would drop a large load of coins at a given pt in time anymore than a Steve Jobs would dump a large load of Apple stock at a given time which he never did?

Bitcoin is NOT A STOCK. It is a CURRENCY that if you invest in it, it is on the HOPE that early adopters DON'T SELL.

There is no PRODUCT. There is no COMPANY. There is absolutely no basis for any value except SCARCITY.

Any RETURN ON INVESTMENT is in the HOPE that OTHER PEOPLE BUY IN and early adopters DON'T SELL.

A STOCK produces RETURNS by INVESTING YOUR MONEY into a COMPANY, thus giving you PART-OWNERSHIP, that works to improve its PRODUCTION. It does NOT require others to buy in to see an investment return, that is called a PYRAMID.


BITCOIN IS NOT A STOCK. It is NOTHING at all like a stock except that it has a limited quantity and an exchange. You do not OWN anything but a digital trash token. No STOCK starts as being worthless.

but there hopefully will be a substantial ECONOMY that will use it to trade one day.  this would then drive demand and eventually the price.

also why do ppl invest in gold?  do you understand the fundamentals behind that?
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October 25, 2011, 04:41:56 PM
 #17

4. Greatly reduce the possibility of people getting scammed/hacked and losing money from it.

And IMO, that is the most important one.  You can scream "be smart" until you're blue in the face, but that won't stop people from doing stupid stuff, and it won't stop Bitcoin from continuing to receive a bad image because of it.
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October 25, 2011, 05:00:08 PM
 #18

but there hopefully will be a substantial ECONOMY that will use it to trade one day.  this would then drive demand and eventually the price.

wish in one hand, sh** in the other... not that this has any bearing on the problem of early adopters, it only makes it worse if they continue to wait to sell.

Quote
also why do ppl invest in gold?  do you understand the fundamentals behind that?

I'll pretend this is an honest question: to protect themselves from the machinations of fiat.

In bitcoin, you trade the fed for the early adopters. Early adopters are already machinating. They are controlling the economy to benefit themselves. Withholding currency to drive up demand; placing huge bid walls to manipulate the falling price. Except now the people are nameless and faceless and answer to no authority.

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October 25, 2011, 06:09:51 PM
 #19

but there hopefully will be a substantial ECONOMY that will use it to trade one day.  this would then drive demand and eventually the price.

wish in one hand, sh** in the other... not that this has any bearing on the problem of early adopters, it only makes it worse if they continue to wait to sell.

Quote
also why do ppl invest in gold?  do you understand the fundamentals behind that?

I'll pretend this is an honest question: to protect themselves from the machinations of fiat.

In bitcoin, you trade the fed for the early adopters. Early adopters are already machinating. They are controlling the economy to benefit themselves. Withholding currency to drive up demand; placing huge bid walls to manipulate the falling price. Except now the people are nameless and faceless and answer to no authority.

i asked you before and you never answered:  why do you begrudge the early adopters who put up their hard earned USD's to buy hardware, pay for electricity, spent time and effort to build and secure the blockchain from scratch, and verify tx's when Bitcoin was worthless with the only hope of getting paid off for doing so by a rising price?
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October 25, 2011, 07:05:12 PM
 #20

i asked you before and you never answered:  why do you begrudge the early adopters who put up their hard earned USD's to buy hardware, pay for electricity, spent time and effort to build and secure the blockchain from scratch, and verify tx's when Bitcoin was worthless with the only hope of getting paid off for doing so by a rising price?

I never answered because it is a pointlessly rigged question. They didn't have to buy hardware, they paid an absolute pittance in electricity, and a computer spent time and effort to build the block chain and verify tx's, not people. They're not delivering mail in a war zone in the Congo. The only one who had any claim to profit from actual work was Satoshi for coding the software. But it is open source, a type of software that millions of people work on everyday with absolutely no intent in profiting.

I've never said early adopters don't deserve a profit. I've always argued that early adopters sure as shit don't deserve to control the economy. Even if they "trickle in" coins over years, with the hordes accumulated from early adoption, one could potentially INDEFINITELY support themselves, their children, their grandchildren, their great-greatchildren, and so on without ever doing a single thing for the economy once it reached a minimum amount of stability.

Early adopters could have said that they plan on stabilizing the price, could have been completely transparent about it and taken a one-time profit (which would have been in the millions, quite a fair payment imo). But Satoshi especially went to immense lengths to remain totally anonymous and then disappeared. These are not the actions of a rational actor. These are the actions of someone who is looking to pump and dump. And probably already did. Problem is, he still has hundreds of thousands of coins to do it all over again many times.

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October 25, 2011, 07:07:48 PM
 #21

i asked you before and you never answered:  why do you begrudge the early adopters who put up their hard earned USD's to buy hardware, pay for electricity, spent time and effort to build and secure the blockchain from scratch, and verify tx's when Bitcoin was worthless with the only hope of getting paid off for doing so by a rising price?

I never answered because it is a pointlessly rigged question. They didn't have to buy hardware, they paid an absolute pittance in electricity, and a computer spent time and effort to build the block chain and verify tx's, not people. They're not delivering mail in a war zone in the Congo. The only one who had any claim to profit from actual work was Satoshi for coding the software. But it is open source, a type of software that millions of people work on everyday with absolutely no intent in profiting.

I've never said early adopters don't deserve a profit. I've always argued that early adopters sure as shit don't deserve to control the economy. Even if they "trickle in" coins over years, with the hordes accumulated from early adoption, one could potentially INDEFINITELY support themselves, their children, their grandchildren, their great-greatchildren, and so on without ever doing a single thing for the economy once it reached a minimum amount of stability.

Early adopters could have said that they plan on stabilizing the price, could have been completely transparent about it and taken a one-time profit (which would have been in the millions, quite a fair payment imo). But Satoshi especially went to immense lengths to remain totally anonymous and then disappeared. These are not the actions of a rational actor. These are the actions of someone who is looking to pump and dump. And probably already did. Problem is, he still has hundreds of thousands of coins to do it all over again many times.
This + 1.

It's not about having a problem with early adopters being rewarded.  It's about having a problem with a single person holding more than 0.5% of the currency.  That should never, ever happen, or the currency will be subject to the whims of that person.
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October 25, 2011, 07:12:07 PM
 #22

i asked you before and you never answered:  why do you begrudge the early adopters who put up their hard earned USD's to buy hardware, pay for electricity, spent time and effort to build and secure the blockchain from scratch, and verify tx's when Bitcoin was worthless with the only hope of getting paid off for doing so by a rising price?

I never answered because it is a pointlessly rigged question. They didn't have to buy hardware, they paid an absolute pittance in electricity, and a computer spent time and effort to build the block chain and verify tx's, not people. They're not delivering mail in a war zone in the Congo. The only one who had any claim to profit from actual work was Satoshi for coding the software. But it is open source, a type of software that millions of people work on everyday with absolutely no intent in profiting.

how do u know they didn't have to buy hardware?  alot of early miners clearly did and bought lots of it.
i guess the paper shufflers on Wall St would disagree with you about not delivering value as well as they just sit behind their computers and push buttons.
those open source workers are probably speculating on Bitcoin just like the rest of us.
Quote

I've never said early adopters don't deserve a profit. I've always argued that early adopters sure as shit don't deserve to control the economy. Even if they "trickle in" coins over years, with the hordes accumulated from early adoption, one could potentially INDEFINITELY support themselves, their children, their grandchildren, their great-greatchildren, and so on without ever doing a single thing for the economy once it reached a minimum amount of stability.

i disagree that they are controlling the economy.  i'd argue that the naysayers are the ones driving down the price and thus the eonomy.  they've flooded this forum with FUD since the Spring.

Quote

Early adopters could have said that they plan on stabilizing the price, could have been completely transparent about it and taken a one-time profit (which would have been in the millions, quite a fair payment imo). But Satoshi especially went to immense lengths to remain totally anonymous and then disappeared. These are not the actions of a rational actor. These are the actions of someone who is looking to pump and dump. And probably already did. Problem is, he still has hundreds of thousands of coins to do it all over again many times.

this is just your opinion.
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October 25, 2011, 07:17:07 PM
 #23

i'd argue that the naysayers are the ones driving down the price and thus the eonomy.  they've flooded this forum with FUD since the Spring.
The increase in the quantity of Bitcoins more quickly than an increase in the number of real goods and services being purchased with Bitcoins is responsible for the decrease in price.
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October 25, 2011, 07:18:54 PM
 #24

how do u know they didn't have to buy hardware?  alot of early miners clearly did and bought lots of it.

No, they clearly didn't (see first 32,000 blocks and how the average time is 13 minutes which is about 4 CPUs worth, and never deviated or increased in difficulty), and even if they did, we are talking a few hundred dollars for millions in profits.

Quote
i guess the paper shufflers on Wall St would disagree with you about not delivering value as well as they just sit behind their computers and push buttons.

paper shufflers on wall st have caused the worst economic crisis since the great depression by screwing with the currency. It is the exact same power that early adopters have and will abuse.

You are obviously a bitcoin shill so there is little point in saying anything more.

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October 25, 2011, 07:26:10 PM
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i disagree that they are controlling the economy.  i'd argue that the naysayers are the ones driving down the price and thus the eonomy.  they've flooded this forum with FUD since the Spring.
It doesn't matter whether they are currently doing so or not.  What matters is that they have the capability to do so.  You can't trust a currency when people have that kind of power over it, even if they profess to be do-gooders and haven't shown any signs of potential malicious behavior.
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October 25, 2011, 09:25:35 PM
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i disagree that they are controlling the economy.  i'd argue that the naysayers are the ones driving down the price and thus the eonomy.  they've flooded this forum with FUD since the Spring.
It doesn't matter whether they are currently doing so or not.  What matters is that they have the capability to do so.  You can't trust a currency when people have that kind of power over it, even if they profess to be do-gooders and haven't shown any signs of potential malicious behavior.

If someone was dropping huge quantities of bitcoins to "control" the economy, they would be diluting their power pretty quickly. Basically it is better that someone dumps all of their coins now and causes the ripples in the economy when it doesn't really matter much.

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October 25, 2011, 10:58:16 PM
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i disagree that they are controlling the economy.  i'd argue that the naysayers are the ones driving down the price and thus the eonomy.  they've flooded this forum with FUD since the Spring.
It doesn't matter whether they are currently doing so or not.  What matters is that they have the capability to do so.  You can't trust a currency when people have that kind of power over it, even if they profess to be do-gooders and haven't shown any signs of potential malicious behavior.

If someone was dropping huge quantities of bitcoins to "control" the economy, they would be diluting their power pretty quickly. Basically it is better that someone dumps all of their coins now and causes the ripples in the economy when it doesn't really matter much.
You're missing the point.

It's not about the actual act of dumping coins, it's about the threat that they could do so at any time and cause economic turmoil, that makes a currency untrustable.  I completely agree that it would be better if someone dumped all of their coins early on.  It would spread the coins so that a single person doesn't have that kind of power anymore.  But, with early adopters STILL holding on to Bitcoins, that threat is still there.  And it will be there for a long time, even if those early adopters DO move their coins, simply because we wouldn't know whether they just moved them to a set of addresses they own elsewhere, or whether they actually sold them to a variety of people.

In summary:  Dumping coins causes a currency to become unstable (with regards to its value), and the threat of dumping coins causing a currency to be untrustable.
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October 25, 2011, 11:37:58 PM
 #28


i disagree that they are controlling the economy.  i'd argue that the naysayers are the ones driving down the price and thus the eonomy.  they've flooded this forum with FUD since the Spring.
It doesn't matter whether they are currently doing so or not.  What matters is that they have the capability to do so.  You can't trust a currency when people have that kind of power over it, even if they profess to be do-gooders and haven't shown any signs of potential malicious behavior.

If someone was dropping huge quantities of bitcoins to "control" the economy, they would be diluting their power pretty quickly. Basically it is better that someone dumps all of their coins now and causes the ripples in the economy when it doesn't really matter much.
You're missing the point.

It's not about the actual act of dumping coins, it's about the threat that they could do so at any time and cause economic turmoil, that makes a currency untrustable.  I completely agree that it would be better if someone dumped all of their coins early on.  It would spread the coins so that a single person doesn't have that kind of power anymore.  But, with early adopters STILL holding on to Bitcoins, that threat is still there.  And it will be there for a long time, even if those early adopters DO move their coins, simply because we wouldn't know whether they just moved them to a set of addresses they own elsewhere, or whether they actually sold them to a variety of people.

In summary:  Dumping coins causes a currency to become unstable (with regards to its value), and the threat of dumping coins causing a currency to be untrustable.

its not worth worrying about large holders b/c they are just part of the market and will always be there.  there's nothing you can do about them and you have no way of predicting what they'll do.  and there will always be some of us who have more money than others.  for all you know they all might all have agreed to not ever sell a coin until the price hits $10,000. 
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October 25, 2011, 11:45:02 PM
 #29


i disagree that they are controlling the economy.  i'd argue that the naysayers are the ones driving down the price and thus the eonomy.  they've flooded this forum with FUD since the Spring.
It doesn't matter whether they are currently doing so or not.  What matters is that they have the capability to do so.  You can't trust a currency when people have that kind of power over it, even if they profess to be do-gooders and haven't shown any signs of potential malicious behavior.

If someone was dropping huge quantities of bitcoins to "control" the economy, they would be diluting their power pretty quickly. Basically it is better that someone dumps all of their coins now and causes the ripples in the economy when it doesn't really matter much.
You're missing the point.

It's not about the actual act of dumping coins, it's about the threat that they could do so at any time and cause economic turmoil, that makes a currency untrustable.  I completely agree that it would be better if someone dumped all of their coins early on.  It would spread the coins so that a single person doesn't have that kind of power anymore.  But, with early adopters STILL holding on to Bitcoins, that threat is still there.  And it will be there for a long time, even if those early adopters DO move their coins, simply because we wouldn't know whether they just moved them to a set of addresses they own elsewhere, or whether they actually sold them to a variety of people.

In summary:  Dumping coins causes a currency to become unstable (with regards to its value), and the threat of dumping coins causing a currency to be untrustable.

its not worth worrying about large holders b/c they are just part of the market and will always be there.  there's nothing you can do about them and you have no way of predicting what they'll do.  and there will always be some of us who have more money than others.  for all you know they all might all have agreed to not ever sell a coin until the price hits $10,000. 
Not true.  There are a variety of ways you could start a currency that avoids giving any single person more than 0.5% of the currency.

I don't mind people having a large amount of money.  The richest man in the world has what, $60B?  But that's pittance compared to the total amount of USD in circulation - $14T, or more.  $60B of $14T is 0.4%.  I don't have a problem with that.  In fact, anything less than 1% would probably be ok.

But it's when you have early adopters in the case of Bitcoin, who have upwards of 7% of the total currency, that you cannot trust the currency until that amount of wealth is redistributed.  Because having that much of the currency really truly DOES mean you wield the power to wreck the economy, just because you feel like it.
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October 26, 2011, 12:18:15 AM
 #30


i disagree that they are controlling the economy.  i'd argue that the naysayers are the ones driving down the price and thus the eonomy.  they've flooded this forum with FUD since the Spring.
It doesn't matter whether they are currently doing so or not.  What matters is that they have the capability to do so.  You can't trust a currency when people have that kind of power over it, even if they profess to be do-gooders and haven't shown any signs of potential malicious behavior.

If someone was dropping huge quantities of bitcoins to "control" the economy, they would be diluting their power pretty quickly. Basically it is better that someone dumps all of their coins now and causes the ripples in the economy when it doesn't really matter much.
You're missing the point.

It's not about the actual act of dumping coins, it's about the threat that they could do so at any time and cause economic turmoil, that makes a currency untrustable.  I completely agree that it would be better if someone dumped all of their coins early on.  It would spread the coins so that a single person doesn't have that kind of power anymore.  But, with early adopters STILL holding on to Bitcoins, that threat is still there.  And it will be there for a long time, even if those early adopters DO move their coins, simply because we wouldn't know whether they just moved them to a set of addresses they own elsewhere, or whether they actually sold them to a variety of people.

In summary:  Dumping coins causes a currency to become unstable (with regards to its value), and the threat of dumping coins causing a currency to be untrustable.

its not worth worrying about large holders b/c they are just part of the market and will always be there.  there's nothing you can do about them and you have no way of predicting what they'll do.  and there will always be some of us who have more money than others.  for all you know they all might all have agreed to not ever sell a coin until the price hits $10,000.  
Not true.  There are a variety of ways you could start a currency that avoids giving any single person more than 0.5% of the currency.

I don't mind people having a large amount of money.  The richest man in the world has what, $60B?  But that's pittance compared to the total amount of USD in circulation - $14T, or more.  $60B of $14T is 0.4%.  I don't have a problem with that.  In fact, anything less than 1% would probably be ok.

But it's when you have early adopters in the case of Bitcoin, who have upwards of 7% of the total currency, that you cannot trust the currency until that amount of wealth is redistributed.  Because having that much of the currency really truly DOES mean you wield the power to wreck the economy, just because you feel like it.

its not rationale for a large holder of btc's to dump them onto the market to crash the price at any pt in time unless you're the gov't or a bank who somehow got their hands on a large chunk of btc and want to destroy it.

for the early adopters however, they will slowly bleed their holdings out to minimize the impact on the price they decide to sell at.  you see this happen all the time with penny stocks where the founders have their brokers slowly sell their large stock positions to minimize a selloff before they achieve their objectives.
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October 26, 2011, 03:30:47 PM
 #31


i disagree that they are controlling the economy.  i'd argue that the naysayers are the ones driving down the price and thus the eonomy.  they've flooded this forum with FUD since the Spring.
It doesn't matter whether they are currently doing so or not.  What matters is that they have the capability to do so.  You can't trust a currency when people have that kind of power over it, even if they profess to be do-gooders and haven't shown any signs of potential malicious behavior.

If someone was dropping huge quantities of bitcoins to "control" the economy, they would be diluting their power pretty quickly. Basically it is better that someone dumps all of their coins now and causes the ripples in the economy when it doesn't really matter much.
You're missing the point.

It's not about the actual act of dumping coins, it's about the threat that they could do so at any time and cause economic turmoil, that makes a currency untrustable.  I completely agree that it would be better if someone dumped all of their coins early on.  It would spread the coins so that a single person doesn't have that kind of power anymore.  But, with early adopters STILL holding on to Bitcoins, that threat is still there.  And it will be there for a long time, even if those early adopters DO move their coins, simply because we wouldn't know whether they just moved them to a set of addresses they own elsewhere, or whether they actually sold them to a variety of people.

In summary:  Dumping coins causes a currency to become unstable (with regards to its value), and the threat of dumping coins causing a currency to be untrustable.

its not worth worrying about large holders b/c they are just part of the market and will always be there.  there's nothing you can do about them and you have no way of predicting what they'll do.  and there will always be some of us who have more money than others.  for all you know they all might all have agreed to not ever sell a coin until the price hits $10,000.  
Not true.  There are a variety of ways you could start a currency that avoids giving any single person more than 0.5% of the currency.

I don't mind people having a large amount of money.  The richest man in the world has what, $60B?  But that's pittance compared to the total amount of USD in circulation - $14T, or more.  $60B of $14T is 0.4%.  I don't have a problem with that.  In fact, anything less than 1% would probably be ok.

But it's when you have early adopters in the case of Bitcoin, who have upwards of 7% of the total currency, that you cannot trust the currency until that amount of wealth is redistributed.  Because having that much of the currency really truly DOES mean you wield the power to wreck the economy, just because you feel like it.

its not rationale for a large holder of btc's to dump them onto the market to crash the price at any pt in time unless you're the gov't or a bank who somehow got their hands on a large chunk of btc and want to destroy it.

for the early adopters however, they will slowly bleed their holdings out to minimize the impact on the price they decide to sell at.  you see this happen all the time with penny stocks where the founders have their brokers slowly sell their large stock positions to minimize a selloff before they achieve their objectives.
I never said a malicious person would have to be rational.  And do you really trust a person to make rational decisions 100% of the time anyway?  I certainly don't.

If you trust the people who hold on to 7% of a currency, then you have no reason for concern.  But the vast majority of the population will NOT trust people who hold such a large amount of it.  And for that reason, they will refuse to adopt it.  That is my point.  You can try to rationalize and justify the holdings of the early adopters all you want, but the bottom line is, it's TOO MUCH.  Not from a greed or envious standpoint, but from a standpoint of wanting to achieve a stable and trustable currency.
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October 26, 2011, 03:45:19 PM
 #32

If you trust the people who hold on to 7% of a currency, then you have no reason for concern.  But the vast majority of the population will NOT trust people who hold such a large amount of it.  And for that reason, they will refuse to adopt it.  That is my point.  You can try to rationalize and justify the holdings of the early adopters all you want, but the bottom line is, it's TOO MUCH.  Not from a greed or envious standpoint, but from a standpoint of wanting to achieve a stable and trustable currency.

And the sick part of it all is that no one can even be sure IF someone holds a large portion of the economy in their back pocket, so many will join up without realizing it. What a sick, sick way to pull off potentially the greatest pyramid scheme in history.

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October 26, 2011, 03:54:15 PM
 #33

I don't think it would be that catastrophic. What happens when there is a major find of some commodity? Suppose Oak Island had 5% of the world's gold buried. Would it destroy gold if that were to be dug up? It would certain tank the price, but things would just balance out again like ripples in a pond.

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October 26, 2011, 04:00:14 PM
 #34

I don't think it would be that catastrophic. What happens when there is a major find of some commodity? Suppose Oak Island had 5% of the world's gold buried. Would it destroy gold if that were to be dug up? It would certain tank the price, but things would just balance out again like ripples in a pond.
At first: It isn't

Second: You'd need to pay people to get that for you in the real world.

There simply isn't any equivalent, the only thing that comes somewhat close are diamonds, and I think it is clear what it is with them.
But it doesn't have to be that way with bitcoin, there are possibilities which weren't yet considered which could solve the problem, but it would have to be voluntary or at least democratic in an anarchistic sense.

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October 26, 2011, 04:01:54 PM
 #35

I don't think it would be that catastrophic. What happens when there is a major find of some commodity? Suppose Oak Island had 5% of the world's gold buried. Would it destroy gold if that were to be dug up? It would certain tank the price, but things would just balance out again like ripples in a pond.
At first: It isn't

Second: You'd need to pay people to get that for you in the real world.

I guess you haven't read much about Oak Island. It might have excavation costs, but they would be less than insignificant in comparison to 5% of the world's gold.

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October 26, 2011, 04:12:30 PM
 #36

I don't think it would be that catastrophic. What happens when there is a major find of some commodity? Suppose Oak Island had 5% of the world's gold buried. Would it destroy gold if that were to be dug up? It would certain tank the price, but things would just balance out again like ripples in a pond.
At first: It isn't

Second: You'd need to pay people to get that for you in the real world.

I guess you haven't read much about Oak Island. It might have excavation costs, but they would be less than insignificant in comparison to 5% of the world's gold.

What?
Are you saying that there actually is more than 5% of the worlds gold on there?
All I can see are speculative theories.... unlikely to be true from the way resources are distributed in nature. Pirate treasures... right  Roll Eyes

With bitcoin it is something different, we can see that in the blockchain and confirm it.
But as I've written: It doesn't have to be that way.... I'm not saying there should be a 'robin hood' movement, a split of the blockchain or the liking... there are other ways to archive that, and if those people are really interested in profit instead of power they would join it... there are a lot of things in 'p2p' yet to be considered...

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October 26, 2011, 04:21:46 PM
 #37

I don't think it would be that catastrophic. What happens when there is a major find of some commodity? Suppose Oak Island had 5% of the world's gold buried. Would it destroy gold if that were to be dug up? It would certain tank the price, but things would just balance out again like ripples in a pond.
Value changes in a commodity don't matter.

Value changes in something that is trying to be used as a currency DO matter, because it affects whether people will want to use the currency or not.  If there is a risk of the value of a currency dropping significantly in the future, without warning and at the whim of a random, unknown person, no one (except those who enjoy risk) will want to use it on a regular basis.
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October 26, 2011, 04:40:20 PM
 #38

I don't think it would be that catastrophic. What happens when there is a major find of some commodity? Suppose Oak Island had 5% of the world's gold buried. Would it destroy gold if that were to be dug up? It would certain tank the price, but things would just balance out again like ripples in a pond.
Value changes in a commodity don't matter.

Value changes in something that is trying to be used as a currency DO matter, because it affects whether people will want to use the currency or not.  If there is a risk of the value of a currency dropping significantly in the future, without warning and at the whim of a random, unknown person, no one (except those who enjoy risk) will want to use it on a regular basis.

Kind of like printed money, and nobody uses that.

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October 26, 2011, 04:53:19 PM
 #39

I don't think it would be that catastrophic. What happens when there is a major find of some commodity? Suppose Oak Island had 5% of the world's gold buried. Would it destroy gold if that were to be dug up? It would certain tank the price, but things would just balance out again like ripples in a pond.
Value changes in a commodity don't matter.

Value changes in something that is trying to be used as a currency DO matter, because it affects whether people will want to use the currency or not.  If there is a risk of the value of a currency dropping significantly in the future, without warning and at the whim of a random, unknown person, no one (except those who enjoy risk) will want to use it on a regular basis.

Kind of like printed money, and nobody uses that.
They don't print an additional 7% of the entire money supply in a day.  Otherwise, yes, that would cause havoc too.
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October 26, 2011, 05:02:56 PM
 #40

I don't think it would be that catastrophic. What happens when there is a major find of some commodity? Suppose Oak Island had 5% of the world's gold buried. Would it destroy gold if that were to be dug up? It would certain tank the price, but things would just balance out again like ripples in a pond.
Value changes in a commodity don't matter.

Value changes in something that is trying to be used as a currency DO matter, because it affects whether people will want to use the currency or not.  If there is a risk of the value of a currency dropping significantly in the future, without warning and at the whim of a random, unknown person, no one (except those who enjoy risk) will want to use it on a regular basis.

Kind of like printed money, and nobody uses that.
They don't print an additional 7% of the entire money supply in a day.  Otherwise, yes, that would cause havoc too.

In some situations it has happened at much faster rates than that. But a day, a year, two years. Either way the value of your currency is fluxuating. What does the time scale matter? There is someone with an infinite reserve of cash that is slowly dumping it into the market. Basically if the money supply is controlled, it's like we are all playing with a tiny fraction of the total money and at any given time it COULD be flooded with as much new money as can be desired.. 

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October 26, 2011, 06:03:19 PM
 #41

I don't think it would be that catastrophic. What happens when there is a major find of some commodity? Suppose Oak Island had 5% of the world's gold buried. Would it destroy gold if that were to be dug up? It would certain tank the price, but things would just balance out again like ripples in a pond.
Value changes in a commodity don't matter.

Value changes in something that is trying to be used as a currency DO matter, because it affects whether people will want to use the currency or not.  If there is a risk of the value of a currency dropping significantly in the future, without warning and at the whim of a random, unknown person, no one (except those who enjoy risk) will want to use it on a regular basis.

Kind of like printed money, and nobody uses that.
They don't print an additional 7% of the entire money supply in a day.  Otherwise, yes, that would cause havoc too.

In some situations it has happened at much faster rates than that. But a day, a year, two years. Either way the value of your currency is fluxuating. What does the time scale matter? There is someone with an infinite reserve of cash that is slowly dumping it into the market. Basically if the money supply is controlled, it's like we are all playing with a tiny fraction of the total money and at any given time it COULD be flooded with as much new money as can be desired.. 
True, it has happened.  And look at what happened to those currencies in which it did happen?  People didn't want or trust those currencies anymore.  They devalued to nothing, and then a new currency had to be created in order to take the old, worthless currency's place.

People are much more likely to trust a government with regards to handling a money supply than they are likely to trust a random, anonymous person.  And even if the person was known, most would still rather trust the government.
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October 26, 2011, 09:40:54 PM
 #42

"The biggest individual holders of gold—central banks, international entities and governments—are believed to account for approximately 16.5 percent of the world's gold, holding about 30,700 tons."

http://www.cnbc.com/id/33242464/The_World_s_Biggest_Gold_Reserves?slide=1

and these are the entities most interested in NOT seeing the price of gold rise.  and yet you are seeing record levels of investment from individuals, funds, etf's, speculators, etc. all risking a huge selloff from the CB's/gov'ts.

why then should you fear the large holders of Bitcoin all of whom probably want to see the price rise?
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October 26, 2011, 09:48:29 PM
 #43

"The biggest individual holders of gold—central banks, international entities and governments—are believed to account for approximately 16.5 percent of the world's gold, holding about 30,700 tons."

http://www.cnbc.com/id/33242464/The_World_s_Biggest_Gold_Reserves?slide=1

and these are the entities most interested in NOT seeing the price of gold rise.  and yet you are seeing record levels of investment from individuals, funds, etf's, speculators, etc. all risking a huge selloff from the CB's/gov'ts.

why then should you fear the large holders of Bitcoin all of whom probably want to see the price rise?
You're not getting it.

GOLD is a COMMODITY.
USD is a CURRENCY.
BITCOIN is meant to be a CURRENCY, but is currently seen as a COMMODITY because of the risk associated with it.

What I have been saying all along is that if Bitcoin is to be seen as a stable currency, there can't be any risk factors, and it must be trustable.  Risk factors can be mitigated by increased usage and adoption, but the trust issue will always be there as long as a single person or small group of people owns a significant portion of it.  People who want to see Bitcoin as an investment don't mind the risk of someone selling out (just like the gold example you mention above), but people who want to see Bitcoin as a currency will be pushed away by the looming possibility of someone manipulating the currency value with their large holdings of it.
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October 26, 2011, 09:52:47 PM
 #44

Stop wasting your breath, Spike. He can't see the forest for the trees because there's a pile of bitcoins in front of him that he has a vested interest to protect. Pyramids don't work if you can't trap more suckers, and bitcoin wasn't all that discerning about who was allowed to be in level 2.

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October 26, 2011, 09:54:09 PM
 #45

Stop wasting your breath, Spike. He can't see the forest for the trees because there's a pile of bitcoins in front of him that he has a vested interest to protect. Pyramids don't work if you can't trap more suckers, and bitcoin wasn't all that discerning about who was allowed to be in level 2.
It's my last attempt.  If this doesn't get through to him, I'm done with that conversation.
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October 27, 2011, 01:35:04 AM
 #46

"The biggest individual holders of gold—central banks, international entities and governments—are believed to account for approximately 16.5 percent of the world's gold, holding about 30,700 tons."

http://www.cnbc.com/id/33242464/The_World_s_Biggest_Gold_Reserves?slide=1

and these are the entities most interested in NOT seeing the price of gold rise.  and yet you are seeing record levels of investment from individuals, funds, etf's, speculators, etc. all risking a huge selloff from the CB's/gov'ts.

why then should you fear the large holders of Bitcoin all of whom probably want to see the price rise?
You're not getting it.

GOLD is a COMMODITY.

thats funny.  there are alot of gold bugs out there who would call it real money which would encompass currency.
Quote
USD is a CURRENCY.
BITCOIN is meant to be a CURRENCY, but is currently seen as a COMMODITY because of the risk associated with it.

What I have been saying all along is that if Bitcoin is to be seen as a stable currency, there can't be any risk factors, and it must be trustable.  Risk factors can be mitigated by increased usage and adoption, but the trust issue will always be there as long as a single person or small group of people owns a significant portion of it.  People who want to see Bitcoin as an investment don't mind the risk of someone selling out (just like the gold example you mention above), but people who want to see Bitcoin as a currency will be pushed away by the looming possibility of someone manipulating the currency value with their large holdings of it.

well there certainly aren't any stable currencies that exist in the world today and yet we all use them.  Bitcoin b/c of its fixed supply has a better chance in the long run to be the most stable of all if you have the vision.

but since you seem to have it all figured out please don't bother to respond.
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October 27, 2011, 04:42:31 AM
 #47

in fact, all you guys are working off this theory that Bitcoin has to have a stable price to enable merchants to succeed.  how quickly you forget how many merchants got off and running when the price was steadily rising earlier this year. 

you guys don't understand markets.   i would argue the best thing for Bitcoin merchants would be if the price starts rising steadily from here.  the cloud would lift, optimism would reappear, and businesses would start flourishing.  speculative money would return to the community and many Bitcoin projects/businesses would be able to get off the ground.  what the community needs is money be it speculative or investment and that will only come if the price stops falling.

i think we've bottomed on the price.  just watch the optimism return if the price starts to go up toward its natural equilbrium which is higher than here.
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October 27, 2011, 03:21:14 PM
 #48

"The biggest individual holders of gold—central banks, international entities and governments—are believed to account for approximately 16.5 percent of the world's gold, holding about 30,700 tons."

http://www.cnbc.com/id/33242464/The_World_s_Biggest_Gold_Reserves?slide=1

and these are the entities most interested in NOT seeing the price of gold rise.  and yet you are seeing record levels of investment from individuals, funds, etf's, speculators, etc. all risking a huge selloff from the CB's/gov'ts.

why then should you fear the large holders of Bitcoin all of whom probably want to see the price rise?
You're not getting it.

GOLD is a COMMODITY.

thats funny.  there are alot of gold bugs out there who would call it real money which would encompass currency.
Quote
USD is a CURRENCY.
BITCOIN is meant to be a CURRENCY, but is currently seen as a COMMODITY because of the risk associated with it.

What I have been saying all along is that if Bitcoin is to be seen as a stable currency, there can't be any risk factors, and it must be trustable.  Risk factors can be mitigated by increased usage and adoption, but the trust issue will always be there as long as a single person or small group of people owns a significant portion of it.  People who want to see Bitcoin as an investment don't mind the risk of someone selling out (just like the gold example you mention above), but people who want to see Bitcoin as a currency will be pushed away by the looming possibility of someone manipulating the currency value with their large holdings of it.

well there certainly aren't any stable currencies that exist in the world today and yet we all use them.  Bitcoin b/c of its fixed supply has a better chance in the long run to be the most stable of all if you have the vision.

but since you seem to have it all figured out please don't bother to respond.

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